What is salary protection cover & why is it so important?

Who wants a share of your wallet or purse?

If it’s not our government wanting a bigger piece of the pie with taxes, then it’s the supermarket down the road raising their prices week in and week out.

And when it comes to shopping – you pay to park your car at a shopping centre, and if that’s not the case, you’re paying a car guard.

Everyone seems to have a plan to separate you from your money!

So yes, you have a right to be sick and tired of it all. Your priority is yourself and your family. That’s why you spend so much on life insurance, car insurance, medical aid, schooling, you name it.

But be honest. Isn’t it great to give? Watching someone’s face light up as they unwrap your gift is so much better than receiving one yourself.

So what can you do if there’s just no money to be nice?

Imagine an ideal world where:

You skip a month of your home repayments and give to your favourite charity? Your bank calls you and you explain why. They reply and say, “No problem, we’ll write it off.”

Or you stop paying your car insurance for a month. When they call you tell them,

“Sorry about that. I gave the money to someone who needed it more than you did.” “No problem,” they reply, “we’ll take the knock.”

Think of it for a moment. Some of us spend R8, 000 a month (or more) on medical aid. Other people wish they could earn half that amount every month.

Question is, “Is there an insurance product out there that allows you to do that?”

The answer is yes – it’s an insurance product offered by Different Life.

Listen, I don’t care where you’re insured – it’s a grudge purchase – and people are always shopping for cheaper.

But what if you could kill two birds with one stone?

Let’s assume that Different Life can offer you the insurance at much the same cost as everyone else, but that they’d also be happy for you to donate a month’s worth of your “premium” to your favourite cause– not theirs?

Aren’t you even a little curious?

And don’t worry…Old Mutual Alternative Risk Transfer Limited (an Old Mutual company) is underwriting the risk so you needn’t worry about them still being around years from now.

Let’s look at the Different Life Salary Protection benefit

Does it cover retrenchment?

When we say salary protection we’re not talking about retrenchment cover.

Salary protection in this context means:

your inability to earn an income because of

a temporary or

Permanent disability.

Is it tax deductible?

The tax deductibility around salary protection changed from March 2015. In the ‘good old days’ you were allowed to deduct the monthly cost for tax purposes. The drawback was that the actual income, when it paid to you, became taxable. Nowadays, the cost is no longer tax deductible, and the income is paid tax-free.

When you claim at Different Life, you need to prove your monthly after tax income. And that’s after tax income but excluding all allowances. Don’t worry; the same applies at every other company.

This also doesn’t mean that Different Life will pay 100% of your after tax income. They will take into consideration all your other disability income, and then pay the difference up to 75% of your monthly income after tax.

How long will I have to wait before my first income?

There’s a 3 month general waiting period before receiving your first income. So, from the date of disability till the first money in your bank account, is three months.

What if I’m able to do another job?

During the first year Different Life will pay you based on your insured occupation. Let’s assume you are an accountant. They’d pay you based on your inability to perform the work of an accountant.

After the 12 months is up, Different Life will pay based on similar occupation. So let’s say you’re qualified by training – or have a skill – which allows you to perform another occupation even though you’re currently disabled. In other words, they look at your employability. If you are employable, even though it’s another occupation, then you are no longer considered disabled.

If your disability is permanent in nature and it’s confirmed, Different Life will pay the monthly insured income until you turn 65 (or until you die).

What if my salary increases and I need more cover?

Different Life offers you what’s called Guaranteed Insurability.

You may increase the monthly benefit with very little underwriting. That’s as long as you haven’t claimed to date. You may increase by up to 25% of the current amount, up until a pre-determined limit.

What else do I need to know?

Your monthly premiums are guaranteed to not increase by more than 6% every year during the first 5 years of you owning the policy.

There is no cash back or surrender value if you cancel the policy.

Here’s how we see it

This is a basic Salary Protection benefit. I compared costs and found it to be very competitive with similar products offered by other life insurance companies.

Why not request a quotation from Different Life? They offer a simple, high quality product backed by an Old Mutual Group company. And they allow you to donate towards your favourite cause? Who else is willing to do that for you?